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Remittances – a growth story

Remittances – a growth story. Leon Isaacs Director Developing Markets Associates leon.isaacs@developingmarketsassociates.com 07909938305. Contents. Global context The UK How remittances work What does the customer actually want Current trends

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Remittances – a growth story

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  1. Remittances – a growth story Leon Isaacs Director Developing Markets Associates leon.isaacs@developingmarketsassociates.com 07909938305

  2. Contents • Global context • The UK • How remittances work • What does the customer actually want • Current trends • UK Remittances Task Force – leading the world • The future – challenges and opportunities Slide 2

  3. The Global Market • US $ 232 billion (source World Bank) • Growth rate 8% p.a. • North – South flows 36% • South-South flows – 30% • Migration is the key driver – 191 million (source UN)

  4. Recorded remittances FDI Private debt and portfolio equity ODA Source World Bank GEP 2006 The importance of remittances can not be underestimated

  5. The UK - Migrants • 2001 Census data • 4,301,280 born overseas • 12% North West/Yorks • 21% Midlands/East England • 54% London and South East • 13% Rest

  6. Where were the migrants born? ‘000 people

  7. Where the money goes 4 5 1 2 3 1 Estimated £2.3 billion Slide 7

  8. How remittances work Slide 8

  9. What senders want • Security • Price • Fair • Transparent • Certain • Convenience • Close to location • Opening hours • Ease of making transaction • Speed/certainty • Quick • Time known guaranteed Slide 9

  10. Global trends • Massive interest from Governments and development organisations • Increased regulation • Consolidation among money transfer companies • Greater interest from banks • Technology beginning to impact • Good news – prices are beginning to fall Slide 10

  11. UKRTF – leading the world Private sector driven, but with public sector funding. OBJECTIVES: • Greater transparency in the UK remittances market • More competitive remittance markets • Better informed remittance consumers • Greater use of formal (versus unlicensed) money transfer channels • Reduced financial exclusion (in both UK and developing countries) • Better information for government and providers • More streamlined and better coordinated regulation of money transfers Slide 11

  12. UKRTF – current projects • Further research – focused on informal sector • Regulation – understanding and influencing policy and uniting the industry • Improving the availability of information for consumers • To comply with regulations • To provide a customer focused standard • Website • Support for smaller MTOs • Implementation of a customer charter Slide 12

  13. Challenges • How to deliver the positive aspects of informal remittances in the regulated market • Inclusion of remittances in the financial system • Continue to provide consumers with the information that they need to make the right choice • Change the focus from the method of transfer to what the funds are used for when they arrive Slide 13

  14. Mid-term report on the industry Making progress but could do better Slide 14

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